The association of the US Securities and Exchange Commission (SEC) and Bitcoin ETFs seems to be age-old now. It all started in March 2017 when the Winklevoss twins proposed Bitcoin ETF COIN. Their proposal was rejected by the SEC citing that Bitcoin was an entity that can neither be regulated nor surveilled.
Immediately after the official announcement of the SEC disapproving this proposed rule change, Bitcoin price witnessed a dramatic makeover. The price plunged from $1,350 to $980 within seconds. However, Bitcoin price recovered very fast, maintaining stability at the $1,100 margin.
2017 didn’t seem to be a good year in terms of Bitcoin ETFs. Similar applications of rule change were filed by Bats BZX Exchange and NYSE Arca to list and trade shares of the Winklevoss Bitcoin Trust and the SolidX Bitcoin Trust ETF respectively. But all of these were rejected by the SEC on the grounds that it is not consistent with the terms and conditions of the Exchange Act.
The SEC’s unfavorable stance towards Bitcoin ETFs continued in 2018 when it again rejected the proposal of the Bats BZX Exchange for a listing of the Winklevoss Bitcoin Trust. Interestingly, the SEC rejected nine similar applications on a particular date, i.e., 22nd August, citing that the applicant’s rules were not well equipped to prevent ‘fraudulent or manipulative acts and practices’ in the crypto market.
Owing to a change in attitude among crypto enthusiasts, the SEC has been criticized for its negative stance towards Bitcoin ETFs. But the SEC seems undeterred even by the dissenting voices within the commission.
As per the latest update, on 29th March, the SEC delayed the VanEck/SolidX bitcoin ETF proposal to May 16, 2019.
The entire crypto community seems to be eagerly waiting for the day when the Bitcoin ETF would be approved by the SEC. An interesting April Fools’ Day hoax by CryptonewsZ seemed to have been really well received!
While some have even gone to the extent of connecting the recent 23 percent Bitcoin rally to this fake coverage on April Fools’ Day. The dramatic bullish trend has seen Bitcoin price settle above the key $5,000 hurdle and test the $5,240 resistance against the US Dollar. The answer to what prompted the sudden Bitcoin rally is, however, still unknown.
The crypto community seems to strongly believe that Bitcoin ETFs would prove to be a catalyst to accelerate the development of the crypto market. It would be good to see the SEC understanding it as early as possible. Till then, just wait and watch